Risk Sharing's Key Role in Strengthening Public Pensions
As Wisconsin and Arizona are demonstrating, fiscally sustainable retirement systems aren't an impossible dream.
Charles Chieppo is a policy expert, author and commentator on a variety of issues including public finance, transportation, and good government. From 2003 to 2005, Chieppo served as policy director in Massachusetts’ Executive Office for Administration and Finance where he led the Romney administration's successful effort to reform the commonwealth's public construction laws, helped develop and enact a new charter school funding formula, and worked on a variety of public employee labor issues such as pension reform and easing state restrictions against privatization. Previously, he directed the Shamie Center for Better Government at Pioneer Institute. While employed by Pioneer, Chieppo served on the MBTA's Blue Ribbon Committee on Forward Funding and has written and commented extensively on T and other transportation issues. He was a contributor to "MBTA Capital Spending Derailed by Expansion," by the Massachusetts Taxpayers Foundation with Pioneer Institute, which won the Government Research Association's "Most Distinguished Research" award.
Chieppo appears regularly on WGBH television’s Greater Boston, WGBH’s Boston Public Radio and WBUR’s RadioBoston. For several years, Chieppo's columns appeared regularly in The Boston Herald. Other media outlets publishing his work include The Wall Street Journal, The Boston Globe, Education Next, USA TODAY, Washington Times, Providence Journal, Nashville Tennessean, CommonWealth magazine, and Governing.
Chieppo is a graduate of Boston University's College of Communication and Vanderbilt University Law School. Charles Chieppo launched Chieppo Strategies LLC in 2006.
As Wisconsin and Arizona are demonstrating, fiscally sustainable retirement systems aren't an impossible dream.
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Providence has dug itself into a deep hole. Can it find the resolve to dig itself out?
Los Angeles wants to use antipoverty funds for development around a private arena. Is that any way to help the poor?
The feds are moving away from them, but states and localities still rely on them. That puts the larger issue of privatization back in the spotlight.
It's bad enough that they're underfunded. Paltry investment returns are likely to make things even worse.
Officials in Maryland's Montgomery County gave unionized workers — and themselves — big raises. Now they can't afford them.
There's something wrong when many California public university students can't get enough to eat while campus presidents' compensation is soaring.
The department faces serious workforce issues that began long before last week's tragedy. They need to be addressed, and it will be painful.
It's likely that other cities will gain a lot from the experiences of the winner of the Smart City Challenge.
The good news is that funding has stabilized. But a number of factors suggest that there's trouble ahead.
It's a difficult problem for many governments. Massachusetts is beginning to get a handle on it.
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Fiscal and competitive pressures are leading state universities to admit a lot more out-of-state students. That doesn't sit well with a lot of people.
The fiscal problems that afflict Detroit's schools and Illinois' pensions show what happens when elected officials wait too long to act.
Six states don't give their governors line-item veto power. It's an imperfect tool, but it's the easiest way to start getting spending under control.
Parents and voters are coming around to the idea that pay and job security ought to be related to performance in the classroom.
A Seattle area transit agency got into trouble when it tried to gauge voter's attitudes.
What Arizona lawmakers have done gets at many of the most serious problems facing public pensions everywhere. Now it's up to the state's voters.
Asking government workers to contribute more is reasonable. Setting out to punish them isn't.
A public university president's parting payout of nearly $270,000 is raising a lot of questions in Massachusetts.
Two new initiatives show the increasing sophistication of an approach that pays social-services providers only for programs that work.
Reform efforts and an ongoing court case show what happens when the bills come in for overly generous retirement programs.
State policies that require more price transparency could give consumers a powerful tool.
It shouldn't take a budget crisis like the one Kansas is dealing with to force a government to look for more ways to save taxpayer money.
A new GASB rule affecting cities that are part of state cost-sharing retirement plans will be painful, but it's a step forward.
There's something to be said for making all workers chip in for the benefits unions provide. But that doesn't get at the issue of unions that wield too much power.
Plenty more could be done to transform public workforces into meritocracies.
Increases in retirees' longevity are likely to make an already dismal fiscal picture look worse.
By spiking in later years, pension benefits don't align with experience. We need to be fairer to educators who are learning their craft.
As transit agencies move toward income-based discounts, they still need to keep larger issues in mind.
Some new approaches are emerging that could help booming and struggling areas alike.
Unrealistic assumptions about investment returns make it all too easy to fall into a hole like the one Chicago is in.
Recipients of Massachusetts' film credits are selling them off to the tune of hundreds of millions of dollars. That's a box-office bomb for taxpayers.
The more you look at the California high-speed rail project's finances, the shakier they seem.
When an agency fails as spectacularly as the Boston region's transit system has, it's time for some competition.
The ways we calculate pay scales for labor on government projects dramatically inflate the costs.
They're a big success in Massachusetts. So why doesn't the state have more of them?
The D.C. region's Metro system is facing one serious problem after another. What's needed is a new focus on serving its customers.
The early success of a Pennsylvania program for parolees shows the potential for one form of privatization.
The region's port authority tapped the taxpayers for $22 million to build a dock for cruise ships. It's not working out so well.
We're wasting billions on professional development, as a new study documents. What can be done about a culture of low expectations?
Legislation to give the state's auditor better oversight would be a boon for taxpayers.
By running its own charter school for inmates, the San Francisco sheriff's office is making a big dent in recidivism.
Whether a state's economy is recovering or imploding, fairness and excellence are still the issues.
The latest reform effort wouldn't solve the problem, but it at least would help keep it from getting worse.
Has Rhode Island learned anything from the last economic-development shellacking it took?
A dose of outsourcing could go a long way toward fixing some of the Boston-area transit system's problems. But a state law makes that practically impossible.
Nebraska had a good idea: Do away with the costly duplication of bicameralism.
Philadelphia's principals are sacrificing a lot, but they should be thinking like the professionals they are.
It’s hard to imagine a worse idea than counting on casino revenue to prop up an underfunded system.
Massachusetts doesn't have much to show for a billion-dollar program to boost life sciences employment. It's just not something that government is good at.
By moving to shift highway costs away from those who benefit the most, Texas is taking a troubling detour.
New Orleans is using data analytics to get smoke alarms into the buildings that need them the most.
Compared to most American systems, London's is a model of efficiency and fiscal prudence.
Denver is pioneering an innovative website that promises to save taxpayers money while improving the services they get.
President Obama has a good idea: End the use of tax-exempt bonds to finance stadiums.
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By putting off dealing with its retirement-system underfunding problems, New Jersey has dug itself into a 'draconian' fiscal hole.
The region's transit system is crippled by more than terrible weather. It's suffering from decades of irresponsible financial decisions.
An order by Illinois' new governor threatens the delicate balance between the interests of workers and taxpayers.
Police in a Maryland county combined analytics with aggressive goals to put a serious dent in armed robberies.
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The latest effort to resuscitate the New Jersey city isn't relying on tax giveaways alone.
The blurred governance of Portland's streetcar system makes it hard to judge its success or failure.
A new report highlights just how bad things are, but some proposed federal rules are a step in the right direction.
The price the state's voters will end up paying for decades of electing irresponsible policymakers is likely to be very high.
The boosters behind Boston's competition to host the 2024 summer games are promising a transparent process, but there's little sign of it yet.
At some point, the city is going to have to face reality. The alternative is becoming the next Detroit.
There's a better way to forecast investment returns for public retirement systems, but adopting it would put some pensions even further into the hole.
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Thanks to the way the deal to operate the Indiana Toll Road was structured, the state treasury and the road's users don't have anything to worry about.
A Philadelphia program is showing promise for engaging entrepreneurs in solving urban problems.
Think the cost overruns on the Big Dig were bad? The hole just keeps getting deeper for the Boston area's transit agency.
A startup emerging from academia wants to help cities get more value from publicly owned land.
Today's municipal workers have to cut the best deals they can, but nobody's looking out for tomorrow's workers.
Increasingly unable to rely on Washington, states are coming up with new ways to pay for roads. But there are some principles they need to keep in mind.
The idea of shifting the risk of failed initiatives from taxpayers to investors is catching on.
As a new book illustrates, the promised benefits rarely materialize.
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Making it easier to get rid of bad teachers is worthwhile. But it's equally important to reward the good ones.
A bridge-monitoring system used in South Carolina and other states is helping to hold down the costs of maintenance.
Trying to retain its most talented employees in a competitive job market, North Carolina gave thousands of them a pay raise.
Their debt challenges may not be as bad overall as has been portrayed, but some of them are in serious trouble.
Gov. Jerry Brown is working hard to break the state's cycle of boom and bust. The voters seem to like his ideas.
Los Angeles and San Francisco are jumping into variable-rate parking in a big way.
New Jersey is fighting over relatively small civil-service reforms. That shouldn't be surprising, given who's proposing them.
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A decision by state lawmakers to let prospective teachers slide on a basic skills test is a bad idea.
Competing with the likes of Facebook and Google is tough, but it’s more crucial than ever.
Not only is the agency becoming more efficient, but its culture is being changed.
The state has achieved remarkable results in a short time, particularly among African-Americans.
A city with one of the nation’s worst blight problems is now considered a national leader in reducing vacant and dilapidated properties.
If all the parties approve it, a recent agreement will preserve most of the benefits of a sweeping reform law.
When the city's marijuana-licensing program faced a crisis, a team trained in efficiency showed how nimble public employees can be.
The Denver-area union blames privatization, but the causes for its retirement fund's troubles are familiar ones that run deeper.
In leveraging public-private partnerships to replace many of its deficient bridges, Pennsylvania's new approach is realistic about the true costs of a transportation asset.
Three governors whose states have done a poor job of shielding kids from sometimes-fatal abuse and neglect are taking important steps.
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A new study finds reasons for optimism for municipal finances. But California is the outlier.
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The state's pension debt amounts to $100 billion, but the issue underlying the current debate is tax cuts.
A Massachusetts college's traumatic leadership crisis has lessons for governance in the wider world of public universities.
A big salary hike for Boston police might turn out to be the defining issue of the city's hotly contested mayoral campaign. Beyond that, it illustrates a deeper problem.
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Merit-based hiring systems in government are more than a century old, and some of them make managing the public workforce absurdly difficult and complicated. They need to be updated for the modern era.
New York City is trying a new technology-driven teaching approach to improve and personalize math instruction. So far, the results are encouraging.
Massachusetts is about to tie much of its community-college funding to measures of how well the schools educate their students. The state's bold plan is part of a welcome trend.
Gov. Scott Walker says they are. But there are a lot of problems with one-size-fits-all policies.
Residency requirements for municipal workers make it harder to recruit the best and the brightest, but a statewide ban like Wisconsin's may not be the best way to end them.
Information about the pensions for employees of greater Boston's transit agency has been hidden from the public. Now it's a matter of public record.
Investing in sports teams and stadiums is usually a bad deal for cities. Glendale, Ariz.'s multimillion-dollar bet on its hockey team looks like one for the penalty box.
There's abundant evidence that greater Boston's transit agency could save a lot of money by contracting out bus maintenance. But thanks to a restrictive state law, that's not likely to happen.
It rarely works, but that doesn't stop public officials from trying. In two New England states, the lesson is being learned once again.
Teacher education programs have long set a low bar for students seeking to enter the profession. That is finally beginning to change.
Some police and firefighters are getting hundreds of thousands of dollars in pension payouts, draining the city's finances and helping to shrink the public-safety workforce. Pension benefits need to be tied to contributions.
After Hurricane Katrina, New Orleans started over. A far better school system has emerged from the floodwaters.
State lawmakers moving to fix the nation's worst-funded pension system have a choice: a plan that saves a lot of money or one that might survive a court challenge.
Adjustable pension plans could help governments control both risk and their out-of-control retiree-benefit costs.
Students on the technical track need solid academics, not just job training. It's important to spend these public-education dollars wisely.
Under an unusual arrangement dating back to 1948, information about the Boston-area transit agency's pension system doesn't have to be made public. That may soon change, and it ought to.
A Silicon Valley nonprofit wants to take its ideas into thousands of classrooms. It's an experiment worth watching.
The Illinois Lottery is showing that government officials can hold their own with their private-sector counterparts.
There's no doubt that we should be spending more on our roads and bridges and water systems. But what's more important is how we spend it.
They can bring big benefits, but only when combined with fiscal responsibility.
Done right, it can save a lot of money in the long run, and it can benefit not only poor students but their communities as well.
For most states, the new government accountability rules eliminate the main substantive barrier to moving toward less costly defined-contribution plans.
A Massachusetts city's approach to cutting the cost of retiree health care might be a way for other jurisdictions to grapple with the problem.
Instead of outside experts, Denver's mayor is relying on city employees to find savings and deliver better services. The results so far are promising.
A Florida nonprofit is stepping in to help the poor and homeless obtain the identification they need to participate in society.
Before we invest in expansion, we should get serious about maintaining our existing systems.
Rhode Island's capital city is addressing the fiscally crippling problems with its retirement system. Can Illinois find the political will to do the same?
Closing underused school buildings is the right thing to do, but it's never going to be easy.
With a couple of changes, a teachers' union's proposal for rigorous testing for prospective teachers could have a big impact on public education.
Fuse Corps is providing states, localities and community groups with entrepreneurial professionals to help them find the efficiencies that they need now more than ever.
Nothing else has worked. A local entrepreneur is asking the city to give his ideas a chance.
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Governments aren't very good at picking business winners with grants, loan guarantees or tax breaks. They'd do better if they realized their limitations.
Evaluating teachers based on students' test scores isn't a perfect way to identify the best and the worst. But test scores should be part of the process.
New York City's transportation agency has gone a long way toward fixing its finances. Now its challenge is to resist the temptation that has crippled Boston's transit system.
Government work usually goes to the lowest bidder. That's not always the smartest way to spend taxpayers' money.
A new guide provides tools to help beleaguered local officials keep their communities out of a fiscal nightmare.
Washington state's transportation agency provided info to lawmakers and the public on what it's doing. It's paying off big-time.
It can give residents a way to show their support for projects they care about and save the taxpayers money.
Bottom-up reforms have a better chance of turning schools around than state-imposed, centrally managed approaches.
The non-pension benefits that governments owe their retirees threaten to swamp their budgets. The time to fund those benefits is now, not when they come due.
Charters are building a strong record in Massachusetts, and one city’s failing schools are about to benefit.
Gas taxes can no longer provide the revenue to keep up with our needs. We should look at alternative ways to pay for roads and transit systems.
The Seattle area is leading the nation in a manufacturing renaissance as its governments make strategic investments that build on the region's strengths.
Colorado and Massachusetts are moving quickly to repair and rebuild their deteriorating bridges. But there are lessons in the different ways they're paying for the work.
The city has established an office that is dedicated to finding real savings, and it’s is paying for itself in the process.
Massachusetts is taking a hard look at the tax breaks it hands out for economic development. The result may be a move toward using objective metrics to inform decisions about granting them.
Rhode Island and its capital city of Providence face crushing pension-funding issues. They are stepping up big-time.
A comprehensive, multifaceted partnership balances support and compassion with an expectation of self-reliance. And it saves money.
Despite a looming budget shortfall, Wisconsin's governor is fattening some state employees' paychecks. Here's why that's a good thing to do.
All of the states provide tax incentives for economic development, but most of them don’t do a good job of making sure that they’re getting value for the taxpayers' money.
Detroit is about to devolve the management of some of its high schools to the school-building level. It's an approach to school reform that has a good track record.
A new report points the way to achieving efficiencies and cutting operating costs to bridge that funding gap.
Transit agencies are looking for good deals for operating their commuter-rail systems. Amtrak and its allies have a different idea.
Nothing illustrates the unsustainability of traditional public-sector pensions better than the practice of “spiking.”
One big-city public-school system has created its own school of education, and it’s paying off.
The city demonstrated that a comprehensive approach to efficiency could resolve a fiscal crisis while improving service delivery.
Connecticut made some bad choices for its schools in the '90s. It seems to be learning from its mistakes.
We are expanding our transit systems faster than we can pay for them.
Traditional defined-benefit state retirement plans no longer are sustainable. Arguments that alternatives are unfair don’t hold water.
California may be about to find out, if an initiative that’s breathtaking in scope gets onto the ballot.
Schools are collecting mountains of information on their students. They need to do a better job of using it to improve learning.
Newark’s mayor is using a performance-based approach to keeping his city safer by cutting its prison recidivism.
Arkansas’ unique approach to budgeting, a product of the Depression, is helping the state keep out of the red.
Doubling water rates to fix crumbling underground infrastructure isn't popular with Chicagoans. But it's a lot more responsible than the approach that got Jefferson County into trouble.
Doing performance-based budgeting right isn't easy. But it can pay big dividends, especially in a time of scarce resources.
Prospects for a high-speed national rail network are dimming. There are good reasons why.
A New York City initiative aims to help the poor by supporting successful programs — and killing ineffective ones.
An alliance of consultants is helping Chicago and Cook County save money and improve services. And you can’t beat the price.
To attract the best and brightest educators, we need to do something about the disconnect between performance and compensation.
In a time of layoffs and pay freezes for public workers, it’s easy to criticize bonuses for executives who manage billions in public assets. But that doesn’t mean bonuses are a bad idea.
Aiming to improve the efficiency of Chicago’s recycling pickups, Mayor Rahm Emanuel is turning to a competition marked by fairness.
To finance energy-efficiency improvements for local businesses, California's capital is trying an innovative public-private approach
Think the states’ $1 trillion retirement-fund shortfall is bad? One federal pension system’s funding gap dwarfs that scary figure.
Governments collect a lot of information. But that’s just the first step.
Boston’s approach to upgrading its electricity-hungry streetlights, taking maximum advantage of incentive programs and competition, is illuminating.
In financing big transportation projects, Los Angeles shows that it’s learned lessons from debacles of the past.
After spending billions, Kansas City's schools are as dysfunctional as ever. Urban education needs reforms that encompass accountability and performance.
Programs pushing public-sector workers to adopt healthier lifestyles are making a real difference to some governments’ bottom lines.
Chicago officials want a longer school day. Would that just mean ‘more of the same mediocrity’?
Paying for a new road or bridge is one thing. The hard part is providing for maintaining infrastructure over its lifecycle.
To save millions of dollars, Rahm Emanuel wants to change the way garbage is collected. Will the mayor’s idea survive the politics of patronage?
States could reward local governments—and their taxpayers—for finding creative ways to provide services for less money.
New municipalities are popping up around the country, rooted in dissatisfaction with traditional governments. The new cities are experimenting with new ways to deliver services efficiently.
Highly paid public-sector executives are in the headlines. But governments may need to pay top dollar to get the excellence they need.
Outsourcing government services can save money. But governments need to bring their own expertise to bear to de-politicize the process.
Highway gridlock is just getting worse. Technology offers one way to find money for transportation improvements that are desperately needed.
Overhauling public-sector retirement funds for sustainability is a political swamp. But failing to act now would be catastrophic.
Realistic convention-center performance measures would help public officials see the market more clearly as they make decisions about expansion proposals.
Economic success depends on a well-educated workforce. So it makes sense to think of improving education as a tool for boosting a region’s economy.